Location: Winston-Salem, NC | Metro: Iredell County, NC HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $840 |
| 1 Bedroom | $960 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,670 |
| 5 Bedrooms | $1,937 |
| 6 Bedrooms | $2,169 |
| 7 Bedrooms | $2,343 |
| 8 Bedrooms | $2,460 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 27055 in Yadkinville, NC, reveals some key insights into potential investment returns. The Fair Market Rent (FMR) for a two-bedroom apartment in FY 2024 is set at $940 per month, while the market rent based on Census ACS data is $831 per month. Using these figures, we can calculate the implied gross yields when compared to the median home value of $250,336.
First, let's annualize the FMR and market rent figures. For the FMR, multiplying $940 by 12 gives an annual rental income of $11,280. Dividing this by the median home value of $250,336 results in an implied gross yield of approximately 4.51%. On the other hand, the market rent of $831 per month translates to an annual rental income of $9,972. This yields an implied gross yield of about 3.98% when divided by the median home value.
The difference between these two yields highlights the premium that Section 8 tenants can provide. However, it is important to consider the realistic scenario given the local conditions. With a renter density of 20.6%, the demand for rental properties is relatively low, which suggests that landlords might struggle to maintain occupancy rates solely on market rents. In such a case, the higher FMR rate associated with Section 8 could be more sustainable and reliable.
Despite the lack of data on days on market (DOM), the higher gross yield from the FMR scenario is likely more practical for long-term stability. Landlords should weigh the benefits of the higher yield against the administrative requirements and potential challenges of participating in the Section 8 program. Given the conditions, the gross yield of 4.51% from the FMR scenario provides a clearer picture of the financial landscape for Section 8 investments in ZIP 27055.
Data Sources: FMR data from HUD (2027). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.